The President's new health proposal isn't a plan - and it
isn't a tax break, either (despite what some credulous journalists have
reported). It's more like a shell game, reallocating the same dollars
for ideologically-driven purposes while creating the illusion of
activity. That's important now that healthcare is "hot" in DC.

I've gone through the plan in some detail on my healthcare blog, The Sentinel Effect,
but here are the highlights: It provides a flat tax break for people
who purchase health coverage, whether independently or through an
employee health plan.

It also reallocates some money that's currently going to hospitals to
cover caring for the uninsured. (They'll just raise rates to make up
for the shortfall, and it'll wind up coming out of your pockets
anyway.)
The net result of the plan will be short-term savings for many, followed by long-term increases
for most. And people with pre-existing conditions could suffer
immediately under the plan, which led one critic to label the proposal
a "cancer tax."

The plan's designed to encourage "free market competition" among
buyers and sellers in the individual coverage marketplace. It's more
likely to result in the erosion of the employer-centered health
insurance system. That system's highly flawed and I understand the
desire to replace it. The problem is that, without a more comprehensive
plan to replace it, ideas like this one could leave buyers at the
victim of a predatory marketplace.

(In his State of the Union, the President had some kind words for
the highly controversial "association health plan" concept, too. That
set off alarm bells with some consumer advocates.)

This idea's a non-starter among Democrats and progressives. As for
conservatives, even Ramesh Ponnuru in the National Review couldn't
muster more than this limp endorsement. Grover Norquist likes it, but even he must recognize that it doesn't cut revenues to the Federal tax coffers. It's not a tax hike - yet - but it's not going to excite your favorite right-winger very much.

My guess? This proposal, which actually just tinkers with the tax code, is already "code blue."